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Chinas transition from manufacturing to services: Tertiary sector to become the backbone of the economy

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Published Date : Jan 2018

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Advertising and Marketing

No. of Pages : 19 Pages

Chinas transition from manufacturing to services: Tertiary sector to become the backbone of the economy


The Chinese government has in recent years adopted policies actively encouraging the growth of its tertiary sector. These include reforms easing access to the Chinese market for foreign companies, as well establishing a fund which will assist companies in the services sector.

Overall, Chinas percentage share of global GDP has risen from 4.6% in 1950 to more than 20% by 2016.

Emissions from factories and a growing middle class population that is increasingly able to afford fossil fuel driven vehicles instead of relying on bicycles for transport, means that pollution at certain times of the year exceeds 20 times the limit set by the World Health Organization (WHO) as to what it considers maximum healthy exposure to pollution.

One major way in which the Chinese government wants to move the country towards becoming a service oriented economy is by boosting the exports of services and thereby reducing reliance on manufacturing exports.


- Explores how a manufacturing boom resulted in strong Chinese economic growth.
- Explains the consequences of this growth, both positive and negative.
- Covers the reasons why the Chinese government wants a transition away from manufacturing.
- Explores how this transition is progressing.
- Discusses how this transition will impact Chinese economic growth.

Reasons to buy

- How did China's economic rise occur?
- What were the consequences of this economic growth?
- Why does the Chinese government want to reduce reliance on manufacturing and encourage transition towards services?
- Will this transition result in strong double digit growth?
Table of Contents
Overview 2
Catalyst 2
Summary 2
Strong GDP growth brings about immense changes in Chinese society 5
Chinese middle class the worlds largest as wages and urbanization continue to rise 5
Manufacturing key to strong historic growth yet consequences include heavy pollution 7
Transition from manufacturing to service oriented economy recieves government support 9
Demand for higher-end products, increasing wages and declining health increase calls for change 9
Government establishes $4bn fund to encourage high end services exports 10
Double digit rise in foreign funded companies indicates early success 11
Services will increasingly form the backbone of the Chinese economy 12
Tertiary sector now accounts for half of Chinese GDP 12
Export oriented services market will struggle to emulate high growth precedent set by manufacturing exports 13
Conclusions 15
Tertiary sector will become the backbone of the Chinese economy but will not provide the same growth the manufacturing sector provided in the past 15
Appendix 16
Sources 16
Further Reading 17
Ask the analyst 18
About MarketLine 18
Disclaimer 18

List of Figures
Figure 1: China real GDP growth, %, 2000-2015 5
Figure 2: Shanghais financial district transformation, 1987-2003 6
Figure 3: Nominal GDP per capita, $, 1990-2016 6
Figure 4: Average annual wage in China, $, 1990-2017 7
Figure 5: 93% of all imported US flags have been made in China 8
Figure 6: New automobile registrations in China, 2002-2015 9
Figure 7: Face masks are worn by many Chinese people due to high pollution levels 10
Figure 8: Chinas tertiary sector GDP composition, %, 1980-2015 12
Figure 9: WeChat has employed international celebrities like Lionel Messi in its bid to expand abroad 13

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